All Forum Posts by: Brian Foote

Brian, I like the deal. Brunswick is a great town for rental real estate. With the college, the hospital, and tourists in the summer there will always be a demand for rental property.

As an aside, my wife grew up in Newcastle and attended Lincoln Academy. Small world!

@Brian Foote

Hi

It's going to be hard to say precisely without knowledge of your market however those rent numbers are pretty good if I'm seeing the $1600+ for what you're getting into the property for.

The 'gotchas' that I see that I'd want you to really be comfortable with would be that repair cost number - this would have to be a pretty light rehab where you're maybe doing a facelift, etc.  Any major projects would eat through that 10k number very quickly.

Other than that, it looks to me like you're conservative.  I know BP has their own calculator and methods but what we do is just build in a 15% of gross rent multiplier that encompasses capEx, vacancy, deferred maintenance, etc. As long as your rents are good and you're getting the types of properties and tenants you want, this simplifies THINKING about it such that you don't need some crazy calculator and excel sheet to do the analysis on the purchase side.

My view is that is much better time and thought energy spent on the actual construction as there are a thousand ways to control costs and bring value in a rehab.

@Brian Foote The BP calculator makes the deal look worse than it actually is. The report shows $195 for water and sewer, which is normally paid by the tenant. It also shows $200 for Misc. ? This is not an expense and it would not be every month. If you plan on spending 10,000 in repairs, then there shouldn't be a lot to fix for the first year.